Online Casino WTO Ruling Fallout

Officials from Antigua and Barbuda are calling on other members of the WTO to join them in filing for compensation from the United States. This follows a refusal on the part of U.S. officials to address a recent WTO court ruling on the subject of online gambling which went against the United States.



THE HISTORY OF THE CASE

In 2005, Antigua & Barbuda filed a court case against the United States. This case stated that the U.S. was engaging in unfair trading practices, because it banned offshore online casinos from taking U.S. players.

A World Trade Organization treaty signed in the late 1990's called on all signatories to allow free trade of services, if they allow domestic companies to provide the same services. This treaty, the General Agreement on Trade in Services (GATS) was signed by virtually all of the 170 nations in the World Trade Organization.

According to GATS, because the United States allows their citizens to bet online for horse racing and lotteries, the U.S. cannot bar foreign companies from taking online gamblers.

Antigua won the 2005 case involving the GATS provision covering WTO internet gambling.

THE U.S. IGNORES THE WTO

For the next two years, the U.S. dismissed this ruling. In the meantime, the U.S. Congress passed the Safe Port Act. On the tail end of this act was the Unlawful Internet Gambling Enforcement Act, which allowed prosecution of online money processors from processing transactions between American players and offshore online casinos.

The U.S. appealed the 2005 WTO decision, claiming the new law had put the United States in compliance with the ruling. In March 2007, the WTO court ruled once again against the U.S. The World Trade Organization court stated that the internet gambling ban enforced by the UIGEA not only didn't address the ruling, but actually made the U.S. stance on gambling more ambiguous.

GEORGE BUSH TAKES HIS TOYS AND GOES HOME

The U.S. had nearly two months to appeal this latest decision, but refused to do so. The Bush administration now wants to withdraw from the WTO ruling, claiming it had no idea that online gambling fell under the treaty definition of "entertainment".

This ignores the fact that member nations had the opportunity to make separate exceptions for gambling, and that various nations made certain exceptions. The U.S. can hardly claim this issue was not addressed at the time.

And here we thought the Bush administration were firm believers in free trade. It appears the Bush administration is interested in nothing but its narrow ideology, which only includes free trade when it helps Republican campaign donors.

THE FALLOUT

Meanwhile, the U.S. refusal to appeal the March 2007 court decision automatically brings the case to the "resolution phase". This means that any WTO nation can join the Antigua and Barbuda case, demanding compensation done to companies in their nation.

The European Union and Brazil have expressed outrage at the U.S. stance on this case. Officials of these nations see President Bush's contempt for the WTO court as damaging to the U.S. government's credibility. If the U.S. ignores the WTO rulings it finds inconveniant, it loses the moral high ground when other nations ignore later WTO rulings.

With 170 members of the World Trade Organization, you can expect other nations to join in the damages phase of this case.

ARTICLES ON THIS STORY

U.S. Ignores Court Ruling
Antigua Gaming Dispute Continues
U.S. Loses Online Gambling Case

Online Casino WTO Ruling Fallout